FDIC Announcements and Fed Statements: The Week in Crypto Politics

As the week drew to a close, news of a cease and desist letter from the Federal Deposit Insurance Corporation (FDIC) to FTX and other crypto companies emerged.

Here’s a look at some of the crypto-related regulatory headlines from the past week.

Fed push and pull

New guidelines from the Federal Reserve Board have given crypto firms aiming to get a prime account a reason to celebrate. Although the guidelines are not hard and fast rules, they standardize the consideration of master accounts for companies with “new charters”. These may include cryptocurrency depository banks and their trade associations.

On the other hand, a Federal Reserve Governor is pumping breaks on the creation of a US central bank (CBDC) digital dollar. In a recent speech, Governor Michelle Bowman appeared to show a preference for the FedNow service over a US CBDC.

The path to a new European regulator

The European Union may be on the verge of creating a new anti-money laundering regulator overseeing crypto. The “Anti-Money Laundering Authority” is said to come from a set of laws that the European Parliament will consider after the current August recess. If adopted, it will be negotiated with other bodies.

The FDIC’s quest for clarity on crypto

The FDIC has taken action against a number of crypto firms, including FTX, for “false and misleading statements” regarding federal deposit insurance. The recent collapse of companies like Celsius and Voyager raised questions about how deposit security was represented to customers. The FDIC, along with the US Federal Reserve, sent a cease-and-desist letter to Voyager in July stating that the now bankrupt company had falsely conveyed to customers that they “would receive FDIC insurance coverage for all funds provided to, held by, on, or with Voyager.” The agency later reaffirmed that crypto companies are not protected by federal deposit insurance by releasing a new fact sheet about it.

In other FDIC-related news this week, a Pennsylvania senator said in a letter that the agency “may take inappropriate action to deter banks from doing business with legal cryptocurrency-related companies (related to cryptocurrency)”, for example by asking them to avoid extending credit.

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